Pacific Nickel Mines Limited provided an update on activities at its Kolosori direct shipping nickel ore project in the Solomon Islands ("Kolosori Nickel Project"). Following the recent granting of the Mining Lease for the Kolosori Nickel Project 1, the Company is now progressing the key steps to achieve commercial shipment of nickel laterite direct shipping ore ("DSO") cargoes from mid-2023. Key activities for the remainder of 2022 that are required to achieve DSO shipping in 2023 include: the commencement of construction of the DSO loadout wharf, expansion of the existing pioneering camp and facilities to establish a 50-man construction camp, and construction of the mine haul road.

A local contractor has commenced works on the 50-man construction camp and the DSO loadout wharf. The Company reported that the trial ore stockpile, which was designed to blend ore types and approximate the characteristics of stockpiles expected during DSO production and shipping, has successfully provided the necessary information to be incorporated into the Definitive Feasibility Study ("DFS"). Importantly the results are consistent with other laterite/saprolite ores mined and shipped elsewhere in tropical environments.

Pacific Nickel is working closely with financiers Glencore, who recently carried out a site visit as part of its due diligence, to complete the agreement for a USD 22 million project financing facility and DSO offtake sales. During a recent site visit, Glencore's five representatives on site were able to see the ore profile in the wall of the test pit, the stockpile monitoring, and inspected a sample taken from the centre of the stockpile. They were also able to observe the proximity of the initial high grade mining area (1.6% to 1.7% nickel) to the wharf, the wharf site and its proximity to where ocean going vessels can be moored (approx.

500m). The Glencore representatives also met local landowners who provided a welcoming ceremony and reiterated their support for the Kolosori Nickel Project. The Company has commenced work with HBS PNG Pty Ltd, a well-established PNG mining contractor, via an early involvement mandate.

HBS has now completed a site visit and will be confirming mining cost information for the DFS as soon as practicable. The trial stockpile, which was designed to blend ore types and approximate the characteristics of stockpiles expected during DSO production and shipping, has provided information to be incorporated into the DFS. Importantly the results are consistent with other laterite/saprolite ores mined and shipped successfully elsewhere in tropical environments.

Key data from the trial demonstrated the importance of stockpile height, mechanical turnover of the stockpile, and the need for stockpiles in windrows to maximise the drying effects of sun and wind. This process is consistent with other saprolite DSO operations in SE Asia and the Pacific regions.